Publication: Re-Interpreting Sub-Group Inequality Decompositions
Loading...
An error occurred retrieving the object's statistics
Published
2005-08
ISSN
Date
2012-06-20
Author(s)
Elbers, Chris
Mistiaen, Johan A.
Editor(s)
Abstract
The authors propose a modification to the conventional approach of decomposing income inequality by population sub-groups. Specifically, they propose a measure that evaluates observed between-group inequality against a benchmark of maximum between-group inequality that can be attained when the number and relative sizes of groups under examination are fixed. The authors argue that such a modification can provide a complementary perspective on the question of whether a particular population breakdown is salient to an assessment of inequality in a country. As their measure normalizes between-group inequality by the number and relative sizes of groups, it is also less subject to problems of comparability across different settings. The authors show that for a large set of countries their assessment of the importance of group differences typically increases substantially on the basis of this approach. The ranking of countries (or different population groups) can also differ from that obtained using traditional decomposition methods. Finally, they observe an interesting pattern of higher levels of overall inequality in countries where their measure finds higher between-group contributions.
Link to Data Set
Citation
“Elbers, Chris; Lanjouw, Peter; Mistiaen, Johan A.; Özler, Berk. 2005. Re-Interpreting Sub-Group Inequality Decompositions. Policy Research Working Paper; No. 3687. © World Bank. http://hdl.handle.net/10986/8604 License: CC BY 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication On the Unequal Inequality of Poor Communities(World Bank, Washington, D.C., 2004-02)Important differences exist between communities with respect to their needs, capacities, and circumstances. As central governments are not able to discern these differences fully, they seek to achieve their policy objectives by relying on decentralized mechanisms that use local information. However, household and individual characteristics within communities can also vary substantially. A growing theoretical literature suggests that inequality within communities can influence policy outcomes, and that this influence could be harmful or helpful, depending on the circumstances. Empirical investigations into the impact of inequality have, to date, largely been held back by a lack of systematic evidence on community-level inequality. The authors use household survey and population census data to estimate per capita consumption inequality within communities in three developing countries: Ecuador, Madagascar, and Mozambique. Communities are found to vary markedly from one another in terms of the degree of inequality they exhibit. The authors also show that there should be no presumption that inequality is less severe in poor communities. They argue that the kind of community-level inequality estimates generated in this paper can be used in designing and evaluating decentralized antipoverty programs.Publication Revisiting Between-group Inequality Measurement : An Application to the Dynamics of Caste Inequality in Two Indian villages(2010-06-01)Standard approaches to decomposing how much group differences contribute to inequality rarely show significant between-group inequality, and are of limited use in comparing populations with different numbers of groups. This study applies an adaptation to the standard approach that remedies these problems to longitudinal household data from two Indian villages -- Palanpur in the north, and Sugao in the west. The authors find that in Palanpur the largest scheduled caste group failed to share in the gradual rise in village prosperity. This would not have emerged from standard decomposition analysis. However, in Sugao the alternative procedure did not yield any additional insights because income gains applied relatively evenly across castes.Publication A Counterfactual Analysis of the Poverty Impact of Economic Growth in Cameroon(2010-03-01)The Government of Cameroon has declared poverty reduction through strong and sustainable economic growth the central objective of its socioeconomic policy. This paper uses available household survey data to assess the performance of the economy with respect to this objective over the period 1996-2007. The authors use counterfactual decompositions based on both the Shapley method and the generalized Oaxaca-Blinder framework to identify proximate factors that might explain differences in observed outcomes over time, across regions and households. The concept of pro-poorness provides a basis for a normative evaluation of these outcomes. The analysis of changes in the size distribution of economic welfare reveals that formal sector employment, access to credit, education, and urban residence are characteristics that bring significantly high returns to households. Employment in smallholder agriculture has a negative impact on welfare across quantiles. Economic growth was accompanied by significant poverty reduction between 1996 and 2001. But poverty barely decreased between 2001 and 2007 due to very weak growth. Over the same period, household investment in human capital took a serious hit. Given the additional finding that the pattern of growth is characterized by urban bias and regional disparity, the overall assessment is that economic growth has been weakly pro-poor in Cameroon. There is therefore a need to re-examine and possibly reform the mechanisms governing the allocation of public resources designed to support individuals' efforts to improve their standard of living.Publication The Measurement of Inequality of Opportunity : Theory and an Application to Latin America(World Bank, Washington, DC, 2008-07)What part of the inequality observed in a particular country is due to unequal opportunities, rather than to differences in individual efforts or luck? This paper estimates a lower bound for the opportunity share of inequality in labor earnings, household income per capita and household consumption per capita in six Latin American countries. Following John Roemer, the authors associate inequality of opportunity with outcome differences that can be accounted for by morally irrelevant pre-determined circumstances, such as race, gender, place of birth, and family background. Thus defined, unequal opportunities account for between 24 and 50 percent of inequality in consumption expenditure in the sample. Brazil and Central America are more opportunity-unequal than Colombia, Ecuador, or Peru. "Opportunity profiles," which identify the social groups with the most limited opportunity sets, are shown to be distinct from poverty profiles: ethnic origin and the geography of birth are markedly more important as determinants of opportunity deprivation than of outcome poverty, particularly in Brazil, Guatemala, and Peru.Publication Non-Farm Diversification, Poverty, Economic Mobility and Income Inequality : A Case Study in Village India(World Bank, Washington, DC, 2013-05)This paper assembles data at the all-India level and for the village of Palanpur, Uttar Pradesh, to document the growing importance, and influence, of the non-farm sector in the rural economy between the early 1980s and late 2000s. The suggestion from the combined National Sample Survey and Palanpur data is of a slow process of non-farm diversification, whose distributional incidence, on the margin, is increasingly pro-poor. The village-level analysis documents that the non-farm sector is not only increasing incomes and reducing poverty, but appears as well to be breaking down long-standing barriers to mobility among the poorest segments of rural society. Efforts by the government of India to accelerate the process of diversification could thus yield significant returns in terms of declining poverty and increased income mobility. The evidence from Palanpur also shows, however, that at the village-level a significant increase in income inequality has accompanied diversification away from the farm. A growing literature argues that such a rise in inequality could affect the fabric of village society, the way in which village institutions function and evolve, and the scope for collective action at the village level. Failure to keep such inequalities in check could thus undermine the pro-poor impacts from the process of structural transformation currently underway in rural India.
Users also downloaded
Showing related downloaded files
Publication World Development Report 2006(Washington, DC, 2005)This year’s Word Development Report (WDR), the twenty-eighth, looks at the role of equity in the development process. It defines equity in terms of two basic principles. The first is equal opportunities: that a person’s chances in life should be determined by his or her talents and efforts, rather than by pre-determined circumstances such as race, gender, social or family background. The second principle is the avoidance of extreme deprivation in outcomes, particularly in health, education and consumption levels. This principle thus includes the objective of poverty reduction. The report’s main message is that, in the long run, the pursuit of equity and the pursuit of economic prosperity are complementary. In addition to detailed chapters exploring these and related issues, the Report contains selected data from the World Development Indicators 2005‹an appendix of economic and social data for over 200 countries. This Report offers practical insights for policymakers, executives, scholars, and all those with an interest in economic development.Publication Classroom Assessment to Support Foundational Literacy(Washington, DC: World Bank, 2025-03-21)This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.Publication Digital Africa(Washington, DC: World Bank, 2023-03-13)All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.Publication Doing Business 2014 : Understanding Regulations for Small and Medium-Size Enterprises(Washington, DC: World Bank Group, 2013-10-28)Eleventh in a series of annual reports comparing business regulation in 185 economies, Doing Business 2014 measures regulations affecting 11 areas of everyday business activity: Starting a business, Dealing with construction permits, Getting electricity, Registering property, Getting credit, Protecting investors, Paying taxes, Trading across borders, Enforcing contracts, Closing a business, Employing workers. The report updates all indicators as of June 1, 2013, ranks economies on their overall “ease of doing business”, and analyzes reforms to business regulation – identifying which economies are strengthening their business environment the most. The Doing Business reports illustrate how reforms in business regulations are being used to analyze economic outcomes for domestic entrepreneurs and for the wider economy. Doing Business is a flagship product by the World Bank and IFC that garners worldwide attention on regulatory barriers to entrepreneurship. More than 60 economies use the Doing Business indicators to shape reform agendas and monitor improvements on the ground. In addition, the Doing Business data has generated over 870 articles in peer-reviewed academic journals since its inception.Publication Compendium of International and National Legal Frameworks on Sexual Harassment in the Workplace(World Bank, Washington, DC, 2019-12)Sexual Harassment in the Workplace (SHWP) is a universal and widespread phenomenon that affects millions of women of all social strata worldwide. It is an endemic issue that has gained increased visibility and attention since the beginning of the “#MeToo” movement. In this Compendium on International and National Legal Frameworks on Sexual Harassment in the Workplace (the “Compendium”), SHWP is understood as a gender-specific form of violence, commonly directed against women and occurring in employment or the workplace. It includes requests for sexual favors, unwelcome sexual advances or other sexual conduct, whether physical or verbal, which involves a “quid pro quo” aspect (e.g. request for sexual favors used to make employment decisions) and/or creates an intimidating, hostile, toxic, humiliating or offensive working environment. As one of the pervasive expressions of gender-based violence, it reflects discriminatory social norms, stereotypes, impunity and gender inequality. SHWP is viewed as a development challenge and has high economic and social costs. Despite its serious implications for women, employers and society at large, the behavior is widely accepted and minimized. The Compendium provides a survey of the key international and regional instruments as well as national legislation as they relate to SHWP.